PLANNING DELAYS STILL FRUSTRATE HOUSING REVIVAL

By now we should be in the throes of a housebuilding boom. Real after inflation earnings are rising. Home loan rates have seldom been lower. And the pace of mortgage lending is rising.

But while the number of house building starts is off the bottom, recovery here has been slow to gather pace.

The number of homes being built in Scotland remains some 40 per cent down on 2007 with only 15,541 completed last year. And a contributory cause of this sluggishness remains inefficiencies in the planning system.

Latest Scottish Government figures on planning performance show the time taken to decide major housing developments for the first three months of the financial year is now at its slowest yet at over 64 weeks.

This is four times the statutory period of 16 weeks and, compared to the same quarter last year, represents an increase of over 80 per cent whilst the number of applications determined actually fell by 40 per cent.

Even when stripping out four abnormally lengthy decisions, the median is still 37.6 weeks – two weeks longer than the same time period last year.

Says NICOLA BARCLAY, Director of Planning at trade body Homes for Scotland, “My main concern is around the use of processing agreements, the whole point of which is for all parties to agree upfront to a realistic and achievable timescale.

“Of the nine major and seven local applications using such agreements, only half met the agreed programme. This is extremely worrying and must improve if partnership working is to be encouraged and supported going forward.

“Whilst the statistics for smaller developments are better, it is glaringly obvious that the system needs to gear up significantly if Scotland is to provide enough homes to meet the diverse housing needs of its growing population. This demonstrates the scale of challenge facing the independent panel tasked with undertaking the current ‘root and branch’ review of the planning system.”

The 2014 Scottish Household Survey revealed a six per cent fall in home ownership levels between 2009 and 2014 – largely the result of the dramatic decline in private home building and ongoing issues surrounding large mortgage deposits.

And it is more than two years since Audit Scotland highlighted the need for half a million new homes over the next 25 years. Decisive action was needed, said Homes for Scotland chief executive PHILIP HOGG. He urged the Scottish Government “not to wait any longer and take the bold and decisive action which is long overdue and needed now on planning, land availability, funding and help for SME builders to ensure we have enough homes in the right locations to properly house our growing population”.

Across the UK as a whole, housing completions have averaged less than 120,000 annually since 2010, far short of the 250,000 needed to cope with demographic pressures, let alone the political pressure to allow more immigration.

Home-ownership, while still high by international standards, has fallen from over 70 per cent of households in 2001 to 63 per cent today.

Among 25 to 34-year-olds, alarmingly, that share has plunged from 68 per cent to 39 per cent. Only seven per cent of 16 to 25-year-olds own a property, down from 37 per cent little more than a decade ago.

As economist LIAM HALLIGAN pointed out last weekend, “there is now an entire generation, most of whom look set to miss out altogether on the financial and personal security that home-ownership represents.

The government, he said, “must properly reform the planning system, clamping-down hard on land-banking by cynical developers and doing everything possible to make sure the private sector builds a lot more homes in places where people want to live.”

Now reform of the planning system is no easy matter. Competing interests have to be reconciled – builders, developers, farming interests, conservationists, and often local communities who have legitimate fears of saturation and loss of historic character when government pitches up with troublingly large housing targets in their areas.

But there is much that can be done to speed up the consultation and approval process without jeopardising scrutiny.

And more can be done to encourage repair and refurbishment of existing property. Pressure on new build is intensified by a tax regime that imposes VAT on existing home renovation while new build is free of VAT. When the VAT rate is 20 per cent that makes new build a no brainer for many. Yet many existing rundown properties on brownfield sites can be can be restored at accessible prices for young buyers.